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Every year around Easter - as the fiscal year comes to an end - we stop to take stock and look forward. It is a great time to take a deep breath and do our own annual financial health check. The findings of Barnett Waddingham’s fourth annual “Generation WHY?” survey does just this; providing an insight into the financial wellbeing of the UK workforce.
The survey shows statistics we are familiar with; companies continue to focus on retirement, so every year the results show similar things. Organisations tell their employees that they need to save more for retirement now - and try and find better ways of explaining the importance of pensions in a simpler and more effective way than they have before.
The survey suggests that while almost all employees have at least some awareness of their financial health status (although this doesn’t mean that the picture is rosy), for most the road to retirement is a long one. It is some way down their list of priorities, behind day-to-day expenses and making sure they have a roof over their heads. More immediately and worrying is that more than half (58%) do not have a savings parachute that will last more than three months if they were to suddenly lose their income.
The lesson to be learned is that if we always do what we’ve always done, we will always get what we’ve always had. So this time round, let’s pause a little longer. Let’s think and act differently and be bolder. We live in a rapidly changing and unpredictable world which forces employees into taking a fresh view on their financial readiness for today, tomorrow and ‘one day’. The last thing we want to see is the financial wellbeing equivalent of a fad crash diet that makes a difference in the short term but is simply not sustainable longer term.
Our research shows that employees generally accept that having a suitable level of income in retirement is primarily their own responsibility. However, there is a willingness to accept advice and guidance in order to achieve this goal, rather than to seek it out for themselves. Currently, employers are not necessarily a preferred source of financial information and advice, which might indicate a lack of trust between employee and employer in terms of sharing financial information and how it could be used. However, this finding also presents an opportunity to break down these barriers through the mutual sharing of information, support and value.
While technological advances can improve the speed, access and quality of communication, it is still the human touch that seals the deal. Employees don’t want to be isolated; they need to take someone’s hand to guide them on their personal financial journey.
For organisations, there is value to be gained by investing in employees’ overall wellbeing. Recognising and embracing this value through all the aspects of wellbeing will generate long term sustainable employment and business success.
Employers need to do more to think about their employees from a ‘whole person’ perspective and consider their lives and responsibilities outside of work as well as inside. This will help to develop a culture of shared trust and respect in an employment and benefits proposition that is fit for today, tomorrow and the future.
The question is, will employers step forward, extend their hands and take on this challenge?
Riaan van Wyk contributed towards the writing of this blog.